Assistant U. S. Attorneys Emily W. Allen (619) 546-9738, Oleksandra Johnson (619) 546-9769, and Randy Grossman (619) 546-6761

NEWS RELEASE SUMMARY – September 14, 2020

SAN DIEGO – Mendel Goldstein, the owner of a videography business based in Brooklyn, New York, pleaded guilty in federal court today to tax evasion charges relating to a long-running conspiracy with his brother, Rabbi Yisroel Goldstein.

Until around 2018, Yisroel Goldstein was the director and head rabbi at Chabad of Poway, a tax-exempt organization that the brothers used to divert Mendel Goldstein’s income and conceal more than $700,000 in earnings from the IRS.  They hid the money by depositing it into Chabad accounts, then secretly funneling it back to Mendel Goldstein by writing checks to fictitious names like “Mr. Green,” “Mr. Gold,” or “Mr. Fish.”

According to his plea agreement, beginning in 2012, Mendel Goldstein agreed with his brother Yisroel Goldstein that Mendel Goldstein could deposit his freelance videography income directly into bank accounts owned by Chabad of Poway. This allowed Mendel Goldstein to avoid reporting his entire income to the IRS.  In return, the brothers agreed that Yisroel Goldstein would keep 10 percent of Mendel Goldstein’s income as his fee—amounting to about $70,000.  Mendel Goldstein saved approximately $155,881 in taxes he should have paid to the IRS.

As Mendel Goldstein admitted today, the conspiracy operated for several years until December 2018. At that time, Yisroel Goldstein discovered that he was under investigation for tax evasion and other crimes.  He warned Mendel Goldstein about the investigation and encouraged him to conceal his tax evasion by filing delinquent tax returns.

In July 2020, Yisroel Goldstein, along with five other associates, pleaded guilty to fraud charges, admitting that he participated in a complex, years-long, multi-million dollar tax-evasion scheme and other financial deceptions involving theft of public money. Among the schemes he admitted as part of his guilty plea, Yisroel Goldstein outlined the tax avoidance conspiracy he operated with Mendel Goldstein.  Yisroel Goldstein has agreed to cooperate with the ongoing investigation.  He is scheduled to be sentenced by U.S. District Judge Cynthia Bashant on April 26, 2021.

“People who cheat on their taxes are cheating all honest taxpayers,” said U.S. Attorney Robert Brewer. “We will not tolerate the exploitation of non-profit and religious organizations to line the perpetrators’ pockets at society’s expense.”

“The law clearly states that income is subject to tax and must be reported, from whatever source derived, including compensation for services,” said Ryan L. Korner, Special Agent in Charge of IRS Criminal Investigation. “Mr. Mendel Goldstein admitted that he broke the law by hiding over $700,000 in income and willfully evading his taxes for over six years. His tax crime is made even more egregious because he exploited the tax-exempt status of Chabad of Poway to cheat the United States. Today’s guilty plea demonstrates that the IRS will diligently continue our important enforcement efforts despite the ongoing challenges posed by Covid-19. We will work alongside our law enforcement partners in a collective effort to enforce the law and ensure the public trust.”

“This investigation uncovered a conspiracy of crimes involving fraud, deception and evasion that used the cloak of a tax-exempt religious organization, the Chabad of Poway, for personal financial benefit,” said Suzanne Turner, Special Agent in Charge of FBI's San Diego Field Office.  “The FBI takes seriously the harm that financial crimes have on our country. We are all expected to follow the rule of law, and the FBI is charged with enforcing these laws.   Today, Mendel Goldstein has been reminded of this important lesson, as he acknowledged with his guilty plea.”

Judge Bashant presided over today’s arraignment and guilty plea. Mendel Goldstein is next scheduled to appear at a sentencing hearing on December 14, 2020 at 9 a.m.

NEW DEFENDANT AND SUMMARY OF NEW CHARGES

Mendel Goldstein, Case Number 20CR2772-BAS            Age: 63           Brooklyn, NY

Conspiracy to Defraud the United States and Commit Wire Fraud, in violation of Title 18, USC 371

Maximum Penalty: Five years in prison

PREVIOUSLY CHARGED DEFENDANTS AND SUMMARY OF CHARGES                   

Yisroel Goldstein, Case Number 20CR1916-BAS             Age: 58           Poway

Conspiracy to Defraud the United States and Commit Wire Fraud, in violation of Title 18, USC 371

Maximum Penalty: Five years in prison

Alexander Avergoon, Case Number 19CR2955-BAS       Age: 44           San Diego                  

Wire Fraud, in violation of Title 18, USC 1343

Maximum Penalty: Twenty years in prison

Aggravated Identity Theft, in violation of Title 18, USC 1028A

Maximum Penalty: Two years minimum consecutive term in prison

Money Laundering, in violation of Title 18, USC 1956(a)(1)(B)(i)

Maximum Penalty: Twenty years in prison

Bruce Baker, Case Number 20CR1912-BAS                     Age: 74           La Jolla

Conspiracy to Defraud the United States and file false tax returns, in violation of Title 18, USC 371

Maximum Penalty: Five years in prison

Bijan Moossazadeh, Case Number 20CR1893-BAS         Age: 63           San Diego

Filing a False Tax Return, in violation of Title 26, USC 7206(1)

Maximum Penalty: Three years in prison

Yousef Shemirani, Case Number 20CR1895-BAS            Age: 74           Poway

Filing a False Tax Return, in violation of Title 26, USC 7206(1)

Maximum Penalty: Three years in prison

Boris Shkoller, Case Number 20CR1913-BAS                  Age: 83           Del Mar

Filing a False Tax Return, in violation of Title 26, USC 7206(1)

Maximum Penalty: Three years in prison

INVESTIGATING AGENCIES

Federal Bureau of Investigation, Internal Revenue Service